Monday, March 15, 2010

New Mexico revokes $30 million in Clean Energy Tax Breaks from Forest Biomass CompanyBiomass Proponents could not Meet Deadlines for Energy Production

March 15, 2010

The New Mexico Division of Energy Conservation and Management sent a letter on March 12 to Western Water and Power Production, LLC informing the company that it had not met the 24-month milestone to generate electricity as required in the state’s administrative code. The move was heralded by conservation groups and nearby residents after they had pressed the state to enforce its standards for clean and renewable energy tax credits. Demonstrating no progress, the 35 megawatt electricity project had retained the nearly $30 million in tax credits for two years as legitimate renewable wind and solar projects waited in line.

While states and lawmakers in Washington continue to hand out subsidies for biomass energy production, conservationists and citizens are mounting campaigns across the country to prevent what they consider a dirty and destructive source of energy. Burning biomass, especially, that derived from forests, produces twice as much carbon generally than does burning coal for electricity, in addition there are numerous toxic pollutants associated with burning wood for energy. ) See http://www.stopspewingcarbon.com/biomass-facts.html).

Conservationists argue that forests, especially those held in the federal trust, are far more valuable left protected, absorbing and storing carbon. A recent analysis by The Wilderness Society found that the federal forests of the Pacific Northwest and southeast Alaska store almost twice the carbon than is released each year by the burning of fossil fuels in the U.S. It can take centuries for a tree to mature and absorb as much carbon from the atmosphere as might have been stored in a mature tree cut a fed into a biomass energy facility.

Massachusetts voters were the first in the nation to win a successful petition drive that will put a question on the state ballot to end taxpayer and ratepayer subsidies for biomass incinerators. (See http://www.stopspewingcarbon.com/). Citizens in New Mexico as well are working to convince the state that burning forests to generate electricity is unwise both for our forests and the residents that must breath the pollutants released from facilities. (See http://biomassinfo.blogspot.com/). These citizens have asked the state legislature not to include woody biomass, especially that cut from native forests, in the renewable energy portfolio and to make it ineligible by law for clean and renewable energy tax credits.

WildEarth Guardians is working with national conservation interests to educate lawmakers in Washington D.C. about the greenhouse gas emissions and damage to forest ecosystems that result from burning woody biomass to generate electricity. Despite, these efforts, the biomass industry continues to enjoy substantial taxpayer support in the form of federal clean energy incentives found in climate change legislation, the American Recovery and Reinvestment Act, and the Biomass Crop Assistance Program a provision of the Farm Bill.

The revocation of the nearly $30 million in New Mexico state tax credits from the Western water and Power Production LLC is a significant turn of events for clean energy in the state and a portent for woody biomass energy nationwide. Dirty energy produced from the destruction of native forests cannot be considered clean and renewable and should be rejected as such by the states and the federal government.

Wednesday, February 24, 2010

Tuesday, February 23, 2010

A biomass energy company is holding almost $30 million in tax credits hostage with a small concrete slab. The tax credits are issued by the state of New Mexico. At the same time, there are legitimate, renewable energy projects waiting in line. Consumers anxious to get more of their electricity from clean and renewable energy must wait for wind and solar.

Unfortunately, New Mexico's regulators are allowing themselves to be bullied around by biomass electricity proponents. New Mexico's rule, 3.13.19.8 NMAC, states that "Construction of a qualified energy generator shall commence within 12 months of the application’s approval."

The applicant, Western Water and Power Production Limited (WWPP), submitted an application for the state's production tax credits (PTC) that was approved on February 21, 2008.WWPP was required to meet the milestone of commencing construction by February 21, 2009 and they submitted documentation claiming to have done so.

What construction turned out to be, according to WWPP, was a graded road leading to a small slab on concrete. The state agreed on January 10, 2010, almost a year after the deadline in the rule, that this constituted "construction" so WWPP retains its nearly $30 million in tax credits from us the tax payers in New Mexico.

To add insult to injury, WWPP has just requested a waiver from the rule's next milestone that requires it to be generating electrical power and be in commercial operation within two years of the date it was awarded the tax credits. Well, that deadline was February 21!

Now, in an effort to further stall and hold on to the $30 million in clean energy tax credits, Western Water and Power Production LLC has filed a "Request for Waiver" of the state's rules. WWPP wants until year end 2012 to generate electrical power and achieve commercial operation. The company's request is based on " the world-wide melt down of the credit system during the 2008-2010 period."

On top of this insult, WWPP has stated in its request filed with the New Mexico Energy Conservation Division (Energy, Minerals and Natural Resources Department) that it will use "Asian" financing for project development and construction and will sell the power to a "California investor owned utility." So, how is it New Mexican's will benefits from this state tax credit?

Holding New Mexico's tax credits hostage until end of 2012, a period of 5 years, for energy (for California) that should not be considered clean or renewable when legitimate renewable energy producers are waiting in line is simply unacceptable. There are jobs for New Mexicans associated with wind and solar industries now, why should we wait until 2013 for a pie-in-the-sky biomass project?

Let Fernando Martinez (fernando.martinez@state.nm.us), Director of the Energy Conservation and Management Division (http://www.emnrd.state.nm.us/ECMD/index.htm) know this is unacceptable and to deny WWPP's request for a waiver of the state's rules and immediately make a determination based on the rules that the biomass facility in Estancia is no where close to generating electrical power.

Wednesday, February 3, 2010

The biomass-is-carbon-neutral story line put forward in the early 1990’s has been superseded by more recent science that recognizes that mature, intact forests sequester carbon more effectively than cut-over areas. When a tree’s carbon is released into the atmosphere in a single pulse, (the Greenfield burner plans to burn a ton of damp, green wood chips each minute) it contributes to climate change much more than woodland timber rotting slowly over decades.

CORVALLIS, Ore. – A recent study at Oregon State University indicates that some past approaches to calculating the impacts of forest fires have grossly overestimated the number of live trees that burn up and the amount of carbon dioxide released into the atmosphere as a result.

The research was done on the Metolius River Watershed in the central Oregon Cascade Range, where about one-third – or 100,000 acres – of the area burnurned in four large fires in 2002-03. Although some previous studies assumed that 30 percent of the mass of living trees was consumed during forest fires, this study found that only 1-3 percent was consumed.

Some estimates done around that time suggested that the B&B Complex fire in 2003, just one of the four Metolius fires, released 600 percent more carbon emissions than all other energy and fossil fuel use that year in the state of Oregon – but this study concluded that the four fires combined produced only about 2.5 percent of annual statewide carbon emissions.

Even in 2002, the most extreme fire year in recent history, the researchers estimate that all fires across Oregon emitted only about 22 percent of industrial and fossil fuel emissions in the state – and that number is much lower for most years, about 3 perceent on average for the 10 years from 1992 to 2001.

The OSU researchers said there are some serious misconceptions about how much of a forest actually burns during fires, a great range of variability, and much less carbon released than previously suggested. Some past analyses of carbon release have been based on studies of Canadian forests that are quite different than many U.S. forests, they said.

"A new appreciation needs to be made of what we're calling 'pyrodiversity,' or wide variation in fire effects and responses," said Garrett Meigs, a research assistant in OSU's Department of Forest Ecosystems and Society. "And more studies should account for the full gradient of fire effects."

The past estimates of fire severity and the amounts of carbon release have often been high and probably overestimated in many cases, said Beverly Law, a professor of forest ecosystems and society at OSU.

"Most of the immediate carbon emissions are not even from the trees but rather the brush, leaf litter and debris on the forest floor, and even below ground," Law said. "In the past we often did not assess the effects of fire on trees or carbon dynamics very accurately."

Even when a very severe fire kills almost all of the trees in a patch, the scientists said, the trees are still standing and only drop to the forest floor, decay, and release their carbon content very slowly over several decades. Grasses and shrubs quickly grow back after high-severity fires, offsetting some of the carbon release from the dead and decaying trees. And across most of these Metolius burned areas, the researchers observed generally abundant tree regeneration that will result in a relatively fast recovery of carbon uptake and storage.

"A severe fire does turn a forest from a carbon sink into an atmospheric carbon source in the near-term," Law said. "It might take 20-30 years in eastern Oregon, where trees grow and decay more slowly, for the forest to begin absorbing more carbon than it gives off, and 5-10 years on the west side of the Cascades."

Since fire events are episodic in nature while greenhouse gas emissions are continuous and increasing, climate change mitigation strategies focused on human-caused emissions will have more impact than those emphasizing wildfire, the researchers said. And to be accurate, estimates of carbon impacts have to better consider burn severity, non-tree responses, and below-ground processes, they said.

"Even though it looks like everything is burning up in forest fires, that simply isn't what happens," Meigs said. "The trees are not vaporized even during a very intense fire. In a low-severity fire many of them are not even killed. And in the Pacific Northwest, the majority of burned area is not stand-replacement fire."

Fire suppression has resulted in a short-term reduction of greenhouse gases, the researchers said, but on a long-term basis fire will still be an inevitable part of forest ecosystems. Timber harvest also has much more impact on carbon dynamics than fire. Because of this, forest fires will be a relatively minor player in greenhouse gas mitigation strategies compared to other factors, such as human consumption of fossil fuels, they said.

Global warming could cause higher levels of forest fire and associated carbon emissions in the future, the researchers said, although there are many uncertainties about how climate change will affect forests, and no indication that forest fire carbon emissions will become comparable to those caused by fossil fuel use.

This research was published recently in the journal Ecosystems, and funded by the U.S. Department of Energy.

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Editor's Note: Images of different types of forest fire are available to illustrate this story: